On Tuesday, local time, the US Federal Communications Commission (FCC) unanimously voted to finalize a plan involving $1.9 billion in compensation funds to help American rural operators replace the telecommunications network equipment of Chinese companies such as Huawei and ZTE used in their networks.

In 2020, the FCC listed Huawei and ZTE as national security threats to the US communications network. This move will prohibit US companies from using government funds to purchase equipment from these two companies. In December last year, the FCC submitted a plan to require operators that use ZTE or Huawei equipment in their networks to replace these equipment.

FCC Acting Chairman Jessica Rosenworcel said: “These devices may be manipulated, destroyed or controlled. This is an adventure. We will evaluate every network, base station, router and other equipment until all equipment that may threaten national security is removed. This is a difficult task.”

For rural carriers, replacing these equipment is a big problem. Not only are they faced with high replacement costs, it is also difficult to find workers to disassemble and replace the equipment.

Huawei stated in its statement: “The FCC’s rules are purely an unrealistic attempt to fix where there are no violations. The FCC’s initiative will only bring extraordinary challenges to operators in rural or remote areas of the United States. It prevents them from maintaining the same high level and quality of service they provide to customers without interference.”

The final order of the FCC will raise the threshold for operators who are eligible for compensation from 2 million users or less to 10 million users. The FCC estimated in September 2020 that removing and replacing Huawei and ZTE equipment from these networks will cost US$1.837 billion.

Eligible companies can apply for replacement costs for equipment purchased from companies such as Huawei or ZTE before June 30, 2020.

Last month, the FCC voted to pass a plan to ban US telecom networks from using equipment from Chinese companies such as Huawei and ZTE. The FCC can also revoke equipment authorizations previously issued to Chinese companies.

In March of this year, according to a 2019 law designed to protect US communications networks, the FCC determined that five Chinese companies pose a threat to US national security. In addition to Huawei and ZTE, the affected companies include Hytera, Hikvision and Dahua. In August 2020, the US government prohibited federal agencies from purchasing goods or services from these five Chinese companies.